Post on 29-Jun-2020
Club Med + Skift Present:
The Evolution of the All-Inclusive Resort
Spurred by economic factors and shifting guest
expectations, the all-inclusive resort segment is
rapidly expanding with more luxury product, local travel
experiences, and age-delineated services targeting a
wider range of international consumer demographics.
Skift Team + Club Med
www.skift.com www.clubmed.us
If you have any questions about the report
please contact trends@skift.com.
Over 65 all-inclusive resorts worldwide
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Club Med & Cirque du Soleil present CREACTIVETM! It’s not a show, it’s a hands-on experience where you can participate in up to 30 activities inspired from your favorite Cirque du Soleil performances. Get a thrill and learn:
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Over 65 all-inclusive resorts worldwide
1-800-CLUB MED | Your Travel Agent www.clubmed.us /creactive
Over 65 all-inclusive resorts worldwide
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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Club Med, the all-inclusive pioneer and market leader with over 65 premium resorts worldwide, has been welcoming guests since 1950 in stunning locations from the United States, Mexico, the Bahamas and the Caribbean to Asia, Africa, South America, Europe, the Indian Ocean and the Middle East. Creating moments of happiness is an integral part of the legendary brand’s vacation concept, which includes providing incredible experiences ranging from training at top sports acad-emies in Florida and enjoying outstanding snorkeling in Cancun to cycling through rice fields in China and skiing with top instructors in the Alps.
Club Med is continually evolving and finding innovative ways to create memorable travel experiences for its guests around the globe. Most recently, stemming from its longstanding history of trapeze and acrobatic instruction, Club Med has partnered with the iconic Cirque du Soleil, which reinvented the circus arts, to create a com-pletely new experience where guests will be able to learn many of the exciting acrobatic disciplines showcased in famed Cirque du Soleil productions at its resort in Punta Cana, Dominican Republic. The diversity of accommodation and activi-ties, enriching children’s clubs and gourmet dining and drinks provided at Club Med resorts makes them perfect vacation destinations for families and couples of all ages with everything seamlessly included in one price. For more information visit www.clubmed.us, call 1-800-ClubMed (1-800-258-2633) or contact a preferred travel professional. For an inside look at Club Med, follow Club Med on facebook.com/ClubMed,Twitter @ClubMedOfficial or Instagram.com/ClubMed or subscribe to YouTube.com/ClubMed.
About us
The all-inclusive resort experience throughout the Americas and a growing selection of resort destinations worldwide has evolved significantly over the last 15 years. Once considered primarily a hospitality segment catering mostly to budget travelers, the major all-inclusive resort brands today have developed a sophisticated guest experience and wide spectrum of resort amenities and services catering to multiple consumer types within a single property.
The one constant from the beginning is value. The all-in-one pricing model remains a powerful draw for all-inclusive travelers who appreciate knowing the entire cost upfront, save for ancillary charges for add-ons such as special F&B, spa, shopping, sporting and offsite experiences. With air, land transfers, lodging, all F&B, select activities, taxes and tips included in the rate, many travelers deposit their wallets in the room safe and never take it out until it’s time to depart.
The biggest shifts over the last five years include the growth of luxury resorts on par with many top-tier properties in their destination. The economic crisis from 2008-2011 created a new all-inclusive luxury seeker who wanted pampering service, quality dining, beautiful locales and trendy design, but to an unprecedented degree, they were also searching for the best bargains and overall value they could find.
In a related development, the focus on added value also helped drive the creation of more upscale family resorts, where the values inherent in the all-inclusive pricing model play an even more prominent role. Underpinning that, the exponential rise in multi-generational travel aligns well with the all-inclusive resort model due to the wide variety of amenities on-property within a secure and protected environment.
The one challenge for all-inclusive resorts in today’s market stems from the exponential rise in demand for authentic local travel experiences. Because the all-inclusive experience tends to keep most guests on-property for the bulk of their vacations, there’s a conscious effort among hotel brands to develop higher quality travel programs, both on-property and off, that immerse guests in the local culture.
Executive Summary
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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Table of contents
About Skift
Skift is a travel intel-ligence company that offers news, data, and services to professionals in travel and professional travelers, to help them make smart decisions about travel.
Skift is the business of travel.
Visit skift.com for more.
About Club Med 3
Executive Summary 4
Table of Contents 5
Introduction: Behind the Evolution of the All-Inclusive Resort 6
From Couples to Kids: The Rise of All-Inclusive Family Travel 8
The Rise of Sport & Wellness Tourism 10
Higher Guest Expectations Drive a More Competitive Market 13
Resorts Are Selling Beyond The All-Inclusive Package Buy 15
The Rise of Personalized All-Inclusive Luxury 16
Infograph: The Evolution of Club Med 18
The Rise of the Millennial All-Inclusive Traveler 20
The Evolution of All-Inclusive Food & Wine 21
The Rise of Voluntourism & Community Integration 23
The Future of Social Media & Content Marketing 25
5 Key Strategies for All-inclusive Resorts 27
Letter from Xavier Mufraggi, CEO of Club Med North America 28
About Skift 30
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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A variety of travel industry and world economic disruptions over the last 15 years have helped drive the exponential success of the all-inclusive resort industry in the Americas and beyond, each of which helped produce a larger and more varied customer base.
When airlines began cutting their standard 10% commissions to travel agents in the late 1990s, the all-inclusive hotel companies continued to pay 10-12% commissions on their full package price, just like the cruise lines. At that time, all-inclusive companies began ramping up their marketing efforts toward agents promoting this fact, and agents quickly began shifting their attention to selling all-inclusive vacations for the more lucrative payouts.
Around the turn of the century, all-inclusive resorts catered mostly to European, Canadian and Latin American budget travelers. See-ing the rise of interest from the American market, the all-inclusive companies began catering more to the U.S. traveler. They introduced familiar U.S. food and beverage brands, more U.S. television chan-nels, and in-room amenities demanded by American travelers such as coffee makers and irons/ironing boards.
Americans also tend to prefer larger guest rooms and poolside re-laxation, whereas Europeans and Latin American are traditionally drawn to the beach. So hotel companies began to expand the size of their guest rooms, and they constructed lavish, multiple lagoon-pool layouts with large pool bars and poolside programming.
Over the ensuing years, the U.S grew into a primary source mar-ket for all-inclusive resorts in the Americas. The all-in-one pricing model and the inclusivity of integrated amenities within a secure environment also tapped into the needs for many travelers new to international travel. That was fueled by extremely low air/land travel packaging, in part due to the dramatic rise of the Dominican Re-public all-inclusive market at the time, and robust hotel expansion in the Bahamas, Jamaica and Mexico’s east coast through the mid-2000s.
Introduction: Behind the Rise of All-Inclusive Travel in the Americas
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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As more resort product opened and improved in overall quality, the all-inclusive sector also surged in global travel media exposure over the following years, while continuing to earn a better reputation among the American traveling public. The value of all this new media exposure as a marketing vehicle was significant.
Another major impact on the evolution of the all-inclusive industry, the global economic crisis beginning in the fall of 2008 accelerated bookings from a wider, more affluent audience. Suddenly, luxury travelers were looking for package travel bargains. A new influx of high-end consumers willing to try all-inclusive resorts for the first time spurred higher and higher levels of luxury product development and resort services based on heightened guest expectations.
Today, the all-inclusive resort industry in the Americas is now a fully mature hospitality vertical, targeting clearly delineated market seg-ments including single and multi-generational families, couples of all ages, and luxury buyers. In fact, the model is so successful, it’s severely hampered large resort development outside the all-inclusive segment in Caribbean and Mexico beach destinations.
The future of the industry for the major hotel suppliers will revolve around more nuanced evolutions in the overall quality of the guest experience. Expect to see a rise in upscale family-centric resorts, more luxury and wellness resorts and services, and a continued push for more locally authentic cultural experiences.
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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As the all-inclusive market has matured,
so too have the demographics of travelers
booking all-inclusive vacations. Singles and
couples who first visited the hotels a decade
or more ago are now returning with their
children.
Founded by the former Belgian water polo
champion Gérard Blitz, Paris-based Club
Med pioneered the all-inclusive resort model
back in 1950 in Mallorca, Spain. Club Med
now operates over 65 “villages” around the
world, and while the company was once well
known for resorts that catered to singles and
couples, over 90% of the properties today
welcome families.
Club Med has always placed a priority on en-
joying the outdoors, sport-centric vacations
and other experiential activities, long before
that came into vogue in global tourism. Over
the last decade, the company has completely
retooled its operations toward the family
market with a wide range of diverse activities
for kids from four-months-old to teenagers.
While at the same time, Club Med is devel-
oping more dedicated product for parents
seeking a little adult time while the kids enjoy
structured activities.
“Our switch to focus on family clientele was
very important for us, especially in North
America, because there’s a lot of competition
in the all-inclusive marketplace, and one way
we’re different is our unique and enriching
kids programs, offering specialized facilities
with professional supervision,” says Xavier
Mufraggi, CEO of Club Med North America.
“Multi-generational travel is also getting
bigger and bigger as Baby Boomers are retir-
ing, because many of them were not able to
spend time with their own kids, so they want
to make sure they don’t miss time with their
grandchildren.”
Employees at Club Med staff are called
“GOs,” or gentil organisateurs (gracious
organizers), and the resort manager is called
the chef de village (village chief). At Club Med
resorts today, the multicultural spectrum of
GOs represents over 100 countries so there’s
always a strong international flavor at all of
the properties.
One unique feature about Club Med is how
the GOs are encouraged to engage with the
visitors, including dining during meals and
sports activities during the days. This goes a
long way to helping parents and children be
more social and meet new friends, and it adds
a certain spirit of bonhomie during meal time
and scheduled activities that can be quite
infectious, which is somewhat unique among
all-inclusive hotel companies.
Every email featured imagery of the des-
tination – giving prospective travelers a
glimpse of their potential trip, reminding
them visually why they need that vacation.
In addition to timely sending and visual
stimulation, American deploys two types of
content to its abandoned shoppers. Accord-
ing to analysis firm Brafton, some of Ameri-
can’s email content shows, “a single price
point, while others feature two options. The
first email sends flight information to search-
ers who looked up certain trips, but aban-
doned the transaction before checking out.
The second email gives two prices – one for
the exact date being searched and another
for a cheaper option” – allowing flexibility for
travelers who have a destination in mind but
no firm travel dates.
From Couples to Kids: The Rise of All-Inclusive Family Travel
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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Building on its trademark acrobatic trapeze
experiences at many of its resorts, Club Med
partnered with Montreal-based Cirque du
Soleil to launch a new on-property experi-
ence called Club Med CREACTIVE by Cirque
du Soleil. The goal is to teach guests of all
ages a variety of circus acrobatic and artistic
activities including: flying trapeze, acrobatic
bungee, aerial silk acrobatics, tightrope,
trampoline, juggling, percussion and more.
CREACTIVE will launch at Club Med Punta
Cana in the Dominican Republic in June 2015.
The colorful, energetic and whimsical facili-
ties signal the brand’s direction to differenti-
ate itself in the family and experiential travel
market.
“The goal is to have our guests learn the
tricks that they have seen in Cirque du Soleil’s
spectacular shows. They can learn over 25
different activities such as acrobatic bungee
and more,” says Mufraggi. “The focus is really
on creativity and educational experiences.
We see the biggest travel trends around
family travel, experiential travel, education,
adventure and being able to experience
something different. Dancing along a wall 25
feet up in air for the first time like a Cirque du
Soleil acrobat is definitely quite an experience
that you can’t do anywhere else.”
David Meyer, product director for Club Med
North America, adds that children often re-
quire less coaching than adults to try the most
daring activities. He explains that after three
decades of experience with trapeze at many
of the resorts, Club Med understands how to
inspire youngsters to try new things and go
beyond their preconceived limits.
“We have it down to a science to get the
children up there and make them feel safe and
comfortable the whole way, and of course,
they’re harnessed to safety lines,” says Meyer.
“Once they get better, the goal is to have them
be able to do a knee-hang, where they actually
hang their knees onto the bar while they’re
swinging. It’s a pretty unbelievable experi-
ence. It’s something that really gets people
out of their shell, and something they don’t try
everyday.”
For Meyer, the most exciting thing about Club
Med CREACTIVE by Cirque du Soleil is the op-
portunity for guests to interact with actual for-
mer Cirque du Soleil performers. The acrobats
will be able to share many behind-the-scenes
stories about the creativity, storytelling and
technical wizardry that inspired the activi-
ties guests will have the opportunity to try
firsthand.
Club Med CREACTIVE by Cirque du Soleil
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
9
In 2014, Club Med produced the research
report, “Emerging Trends in Healthy Active
Travel,” highlighting the increased demand
for active vacations and wellness. The report
reads:
“Within the past decade, worldwide wellness
tourism has grown as the number of Ameri-
cans striving to achieve healthier lifestyles
has increased. Vacationers are looking for
places that offer a more diverse selection of
activities that are both physical and educa-
tional. The focus on promoting a healthy way
of life has gone hand-in-hand with learning
vacations, during which travelers engage with
different cultures or practice new hobbies.”
Based on those trends, Club Med offers
professionally-led sports academies aligned
with active pursuits specific to each destina-
tion. For example, kids and adults of all ages
can sign up for golf, tennis, triathlon and vol-
leyball academies at Club Med Sandpiper Bay
in South Florida. Pro athletes in each of those
disciplines work at the resorts to share their
expertise with kids and parents, integrating
an extra layer of educational and fitness take-
aways into the vacation experience.
For the tennis program, for example, Club
Med’s tennis coaches developed eight num-
ber one and 26 top-ten players in the world,
including Andre Agassi, Pete Sampras, Jim
Courier and Monica Seles.
“What’s unique for the guests is that those
same coaches that teach these exceptional
players are offering the same lessons for the
guests,” says Meyer. “So the level of instruc-
tion that you are receiving in these different
sports is world-class. They are some of the
best coaches in tennis. Sandpiper Bay also
has an LPGA coach of the year in golf and
former Olympic fitness coaches that are all
offering all-inclusive classes to the guests.”
Other Club Med villages feature professional
sports academies offering everything from
kitesurfing and sailing in the Caribbean, to
skiing and snowboarding in France.
“That is one of the ways we live up to our
tagline: ‘And What’s Your Idea of Happi-
ness?’” says Mufraggi. “People come back to
Club Med because of their memories, so the
idea behind the question is that people on
vacation are not only looking for a bed and a
beach. People are looking for personalized
experiences of a lifetime. When you look at
all of our resorts and everything we offer
relating to things like sports and wellness ac-
tivities, we’re able to give that to our guests.
It’s really about feeling better when you leave
than when you arrived.”
At Club Med Sandpiper Bay, the new Beach
Volleyball Academy is now home to the
National Volleyball League (NVL) in America,
which relocated to Club Med from their previ-
ous facilities in California. That means guests
of all skill levels can now play and interact
with past Olympic beach volleyball players, as
well as Albert Hannemann, CEO of the NVL.
Junior camps and group programs are also
available for an additional cost.
Also at Sandpiper Bay, the Peak Perfor-
mance and Active Wellness Boost packages
include daily group fitness instruction such
as stretch-and-tone, power walking, running,
swimming, water cardio, pilates, yoga and
meditation. Experts are also on hand to teach
nutrition and advanced sports psychology.
In terms of spa and wellness product and
programming, Club Med Sandpiper Bay, Club
Med Punta Cana and Club Med Columbus Isle
on the island of San Salvador in the Bahamas
feature a Club Med Spa by L’OCCITANE. In the
Bahamas, the new 13,000-square-foot spa is
part of a recent $8 million renovation.
The Rise of Sport & Wellness Tourism
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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The majority of Club Med resorts worldwide
have other partnerships with luxury spa and
wellness brands, such as the Carita Paris spa
line at Club Med resorts throughout Europe.
Aside from the menu of individual spa
treatments at each resorts, Club Med is
expanding its roster of spa and wellness-
themed spa packages. For example, the
spas at Club Med Sandpiper, Punta Cana and
Columbus Isle offer a range of 2- to 4-day
Spa Escapes, designed to teach guests the
value of making long-term wellness lifestyle
choices.
Urban/Resort Combo Packages & the Global All-Inclusive Experience
Club Med’s global portfolio of all-
inclusive resorts in first-tier vacation
destinations in the Americas, Asia, Africa
and Europe is a major differentiator in the
all-inclusive segment, with one third of
Club Med resorts located in upscale ski
destinations. Especially for members of
Club Med’s loyalty program—Club Med
Great Members—the all-inclusive resorts
beyond the Americas offer a consistent
guest experience and value proposition
for fans of the brand seeking new travel
experiences.
Club Med Columbus Isle, Bahamas
Club Med Val Thorens, France
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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In December, Club Med Val Thorens opened
in The Three Valleys ski region in the French
Alps, voted “World’s Best Ski Resort” in the
2014 World Ski Awards.
Illustrating the evolution of dining at luxury
all-inclusive resorts, two Michelin-star
chef Edouard Loubet oversaw the menu
development for Club Med Val Thorens’
signature Epicurious restaurant. Val
Thorens also has a dedicated resort app
for mobile check-in, destination and resort
content, and interactive gaming and
music functionality.
In January, as part of their efforts to intro-
duce more luxury resort environments, Club
Med opened Finolhu Villas on a private island
in the Maldives. Part of Club Med’s Villas &
Chalets category, the solar-powered prop-
erty includes 52 gorgeous villas perched over
the pristine teal blue sea. Each villa comes
with its own private pool, in-room iPads and
personal butlers. On-island, there’s a 3,000-
foot white sand beach and pool located near
the Club Med Spa by ILA. Dinner is served at
the upscale Motu restaurant, or guests can
order villa service.
For 2015, Club Med added to a unique twist
to package inclusions with the launch of the
Club Med City Stops Program. The hotel
company is now packaging overnight urban
destinations at major gateway cities on air
routes to Club Med destinations, such as
Paris, Dubai, New York and Miami. Participat-
ing hotels are available in different budget
tiers, and at present, guests can book either
through travel agents or the Club Med call
center.
“It’s especially interesting for international
travelers, for example, North American
travelers love Paris so we have a range of 3- to
5-star hotels they will be able to add to the
resort component,” says Mufraggi. “This is
very new right now but it will add to the over-
all guest experience and provide more excit-
ing and diverse options around the world.”
Club Med Finolhu Villas, Maldives
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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As the all-inclusive vacation segment con-
tinues to expand, the biggest challenge for
the all-inclusive consumer today is the lack
of any consistent rating mechanism to gauge
the quality of the overall experience. The
disparity among resort product, services and
amenities is vast, and also, the consumer is
often at a loss to understand the true brand
differentiators that cater to their personal
travel psychographics and behaviors.
“Since the beginning there has been a
problem for consumers dealing with the all-
inclusives, because of the fact that while the
concept is fairly simple, the hotels them-
selves do not provide the same ingredients
in their all-inclusive packages,” says Richard
Kahn, a longstanding board member of the
Caribbean Hotel & Travel Association (CHTA).
“The consumer buys an all-inclusive package,
and then gets down there and the expecta-
tions are often not met. We continue to hear
complaints about that every year.”
Kahn asserts that to alleviate this, hotels
need to be more transparent when describing
inclusions and restrictions, especially in the
fine print.
“The problem then falls back on the con-
sumer, and the question becomes, does the
consumer actually read that fine print?” says
Kahn. “And we know that they don’t. I think
that’s a problem that needs to be exposed
further so consumers are aware that not all
all-inclusives are the same.”
Kahn continues, explaining that the rise of
guest expectations and the competitiveness
of the marketplace, with so many different
destination and resort options, is driving the
level of service quality to levels on par with
the better European Plan (EP) resorts in the
region. Kahn says companies like Sandals Re-
sorts was one of the first all-inclusive brands
to create benchmarks for luxury service
standards, while at the same time introducing
butler service and fine-dining restaurants.
Adam Stewart, CEO of Sandals Resorts, says,
“Especially within the last three years, we’re
pushing the all-inclusive envelope to higher
levels of service because the expectations
are wildly ahead of where they were before.
Some of this is created by us and out of
the drive and belief that an all-inclusive can
very much be a 5-star experience. We want
to be on the upper end of middle America
and lower upper America. We are the most
expensive in our category but there’s a value
proposition above and beyond service.”
Higher Guest Expectations Drive a More Competitive Market
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
13
Another shift in guest expectations in the
all-inclusive segment is due to the rise in
number of American travelers since the early
part of the century. In 2003, for example, the
Mexico-based AMResorts all-inclusive chain
launched Secrets Capri in the then emerg-
ing destination of Playa del Carmen south of
Cancun.
From the beginning, AMResorts aggressively
targeted the U.S. market by promoting its
American F&B brands in its restaurants and
U.S. television channels in the guest rooms.
Just 12 years later, AMResorts now operates
36 resorts in the Americas with another sev-
en under development, and North Americans
represent the largest ratio of guests.
“AMResorts was created with the North
American traveler in mind,” says Alex Zozaya,
CEO of Apple Leisure Group, the parent
company of AMResorts. “As part of our effort
to cater to this travel segment, we made
a conscious effort to utilize recognizable
brands, like Heinz for example, which helps to
create a sense of familiarity among travelers.
It is one of our key differentiators, and it has
helped us become extremely successful in
targeting North American travelers.”
According to Zozaya, through AMResorts and
its five sister companies, Apple Leisure Group
is responsible for bringing every two in ten
American travelers to the Caribbean.
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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Kristina D’Amico, a senior analyst, hospitality
consultant and hotel appraiser at the HVS ho-
tel consultancy company, confirms that the
biggest shift in the all-inclusive industry is the
rise of quality across all different budget seg-
ments. Prices are remaining “very reasonable
and often lower than you would expect,” and
she says there’s a shift to building new resort
product to American standards with fast
Wi-Fi, 5-fixture bathrooms, restaurants with
dedicated kitchens, more luxurious bedding
and furnishings, and upscale electronics.
Another trend she sees is the frequency of
more add-on purchase options at restau-
rants, bars, spas and other outlets because
hotels are attempting to build incremental
sales, and consumers are more and more will-
ing to splurge outside the initial all-inclusive
vacation package purchase.
“General managers are saying that people
want to spend an extra $50 to get a truly
great wine or a private dinner setting outside
with personal service,” says D’Amico. “People
still want to make spontaneous travel pur-
chase decisions, and because it’s an all-in-
clusive resort, they know there won’t be that
sticker shock at the end of the stay, so why
not spend a little extra here and there.”
D’Amico says it all boils down to the value
proposition, and hotels should leverage that
guest demand for add-on values by offering
truly customized and/or high-end products
and services for bespoke experiences aligned
with their particular guest profiles.
In terms of future growth, D’Amico says,
“There’s still somewhat of a stigma attached
to all-inclusive hotels for many American
travelers who still imagine things like just
okay food. When in fact, many resorts have
five or six restaurants now where men wear
slacks, women dress up, and it’s a real dining
experience. Changing that perception is still
the industry’s biggest challenge.”
Resorts Are Selling Beyond The All-Inclusive Package Buy
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
15
The next shift in the continuing evolution of
quality throughout the all-inclusive resort
sector relates to personalizing the guest
experience for both couples and families.
Because there is now a growing influx of
family bookings, there are a lot more children
on-property, so companies like Club Med are
diversifying product offerings to create more
age-specific areas at each resort.
“We have more and more dedicated areas for
couples and areas for children,” says Mufrag-
gi. “Because what we’re realizing is parents
still like to have a nice restaurant where there
are no kids, or a pool or a whole area that’s
designed just for parents or couples who
want some adult time without bumping into
babies.”
For parents and couples, Club Med is creating
peaceful new Zen Oasis areas at resorts like
Club Med Punta Cana and Bali. These private
adults-only areas feature dedicated facilities
such as a “zen pool” with in-water lounge
chairs, a lap pool, yoga palapa and wellness
bar serving healthy F&B.
The Zen Oasis initiative is expanding into the
room product as well. Club Med Punta Cana is
developing 78 guest rooms with spa-inspired
bathrooms including rainfall showers, soaking
tubs, chromatherapy lighting and L’Occitane
spa products.
For the kids, Club Med is continuing to
develop and expand venues and activities
designed for toddlers and children at different
age levels. According to Mufraggi, parents
sometimes feel guilty about “abandoning”
their children, but if the venues and activi-
ties are compelling enough, that then drives
the attraction for youngsters. In turn, when
parents see that their children are engaged
and excited about their time away from them,
that attaches an emotional value to a brand
that’s absolutely gold for hotel companies.
“Parents love it because they aren’t forcing
their kids to do something, and the kids don’t
want to go,” says Mufraggi. “Last time when
I was with my family in Cancun, my daugh-
ter loved the evening shows, and she loved
being together with her friends, so we were
convincing her to stay with us. She was like,
“Okay papa, okay mommy, I will have dinner
with you tomorrow night, okay?’”
Part of Melia Hotels International, the Para-
disus Resorts all-inclusive brand operates
in the Dominican Republic and the Cancun/
Riviera Maya corridor. The company has
helped set the bar for luxury service and more
modern upscale design in the all-inclusive
segment.
The Rise of Personalized All-Inclusive Luxury
Deluxe Zen Room, Club Meb Punta Cana, Dominican Republic
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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In the Dominican Republic, Paradisus Punta
Cana and Paradisus Palma Real Golf & Spa
Resort both have a separate, self-enclosed
luxury communities called The Reserve. The
all-suite accommodations wrap around a pool
area exclusive to guests of The Reserve next
to the comprehensive resort spas. Guests at
The Reserve also enjoy a wide range of added
amenities from free golf to family concierges,
and there are on-demand complimentary
shuttles to the main resort.
“When you have such a major economic
adjustment that recently took place glob-
ally, I think you started to get a very different
type of customer that was suddenly willing
to experience what an all-inclusive had to
offer,” says Tony Cortizas, VP of global brand
A signature brand standard for Paradisus
Resorts, the Gabi Clubs are South Beach-
style, day- and nightlife experiences defined
as “Innovative settings with sensual, relaxing
and cutting-edge architecture. Gabi Club
perfectly combines chic with sophistication.”
The venues provide an entirely different
experience from the busy main resorts, pro-
viding one more option for guests who value
modern design to personalize their vacation.
“We’re all on beaches, we all have nice resorts,
but in the end I think it’s the experience
strategy at Melia Hotels International. “There
were many factors conspiring to drive a
Ritz-Carlton type customer to an all-inclusive
experience for the first time, which has raised
demand for a product like The Reserve.”
Cortizas says contemporary architecture and
interior design represent one of Paradisus’
brand differentiators. The old days where
rooms featured a lot of dark heavy woods,
clay pottery and other pseudo-ethnic embel-
lishments have been supplanted with modern
art and furnishings. Cortizas explains that the
next generation of all-inclusive consumers
have grown up with innovative design based
on the populist modern appeal of companies
like IKEA and Target, and they now expect
that in hospitality and tourism.
that people pay for and what they want,”
says Cortizas. “You’ve got to be good with
your design, and we’re continuing to try and
evolve the design and guest rooms. The
room product in the DR is quite different than
what we’ve had before, and guests expect
good design. That’s a phenomenon that’s
fundamental throughout hospitality, and the
Paradisus brand is an example of that, which
is going to a completely new level next year
when we open in Costa Rica.”
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
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18
THEEVOLUTION OF CLUB MED
+
1950CLUB MED PIONEERS THE ALL-INCLUSIVE CONCEPT WITH ITS FIRST VILLAGEIn the Balearic islands with a purpose to develop appreciation for the outdoors and the practice of physical education and sports. The Club Med “spirit” of fitness, freedom and fun has begun.
1967CLUB MED PIONEERS THE CHILDREN’S CLUB CONCEPTClub Med’s first guests have grown up and become parents, thus its villages begin implementing “Mini Clubs.”
1989CLUB MED LAUNCHES CLUB MED 1 The largest passenger sailing ship to date atthat time, allowing for a floating Club Med village.
2006CLUB MED OPENS ITS FIRST 5-T LUXURY SPACE With Le Riad – housed within the 4-Trident Club Med Marrakech La Palmeraie.
UPSCALE EVOLUTION
2004CLUB MED STRENGTHENS ITS FOCUS ON CREATING MORE UPSCALE RESORTS
1976CLUB MED OPENS A VILLAGE IN CANCUN And pioneers yet another destination.
1957CLUB MED BEGINS OFFERING SCUBA DIVING, WATER SKI AND SAILING LESSONS,Which were sports that were previouslyreserved for only a handful of athletes, building its reputation as the world’s largest sports school.
TRAPEZE AND CIRCUS LAUNCHES AT CLUB MED
1983
25%
by
20004-TResorts
75%
4-T 5-TResorts
2014
1956CLUB MED HITS THE SLOPESAnd successfully launches its first ski resort in Switzerland.
19
LOCATION
COST
38.6%
36.0%
16.7%
8.7%
ACTIVITIES
LOCAL CULTURE/EXCURSIONS
ON-SITE ACTIVITIES
10.3%
46.8%
50.4%
32.0%
26.0%
15.5%
SPASERVICES
OFF-SITE EXCURSIONS
CHILDCARE
PREMIUMWINE/DRINKS/FOOD
NONE OFTHE ABOVE
2010CLUB MED ARRIVES IN CHINAOpening the country’s first all-inclusive ski resort and expanding the brand’s growing Asian portfolio.
2014CLUB MED OPENS ITS FIRST CROWDSOURCED RESORT With Club Med Val Thorens in France – selecting key elements of the ski resort based on feedback from its social media followers
CLUB MED TAKES ITS DECADES OF TRAPEZE AND ACROBATIC INSTRUCTION TO NEW HEIGHTS With a partnership with Cirque du Soleil and the launch of Club Med CREACTIVE by Cirque du Soleil
CLUB MED OPENS ITS FIRST 100% SOLAR POWERED LUXURY RESORT With Finolhu Villas in the Maldives
2015
WHAT WAS THE KEY CONSIDERATION IN CHOOSING AN ALL-INCLUSIVE RESORT?
*Skift and Club Med surveyed 1,087 all-inclusive travelers
WHAT AMENITIES/ACTIVITIES WOULD NEED TO BE INCLUDED FOR YOU TO PURCHASE AN
ALL-INCLUSIVE TRIP?
SKIFT SURVEYS: THE ALL-INCLUSIVE TRAVELER
With so much competition in iconic tourist
destinations from Rio de Janeiro to Mexico’s
Riviera Maya, there’s a powerful drive among
the major all-inclusive resort chains to deliver
more high-impact experiences on-property.
However, there’s growing uncertainty about
how to cater to millennials today.
Hard Rock Hotels is a newcomer to the all-
inclusive scene with four hotels in Mexico
and one in Punta Cana in the Dominican
Republic. Another in Los Cabos is presently
under development. The focus on music
memorabilia, outdoor live musical events, and
a general counter-culture attitude is resonat-
ing with younger customers today, as well as
parents looking to sync up with the brand’s
edgy spirit.
“We started the Hard Rock all-inclusive
brand four years ago to turn the all-inclusive
industry upside down on its head,” says
Frank Maduro, VP of marketing for Hard Rock
Hotels All-Inclusive Collection. “We wanted
something that was going to disrupt the
marketplace so we looked at what would be
unexpected. First, it’s a brand you wouldn’t
relate to all-inclusives for starters. It’s a qual-
ity brand, it’s a world renowned brand. Two,
we have elements that aren’t typically found
with an all-inclusive brand, like the music
and the music memorabilia and the attitude,
which are all a little bit different.”
Hard Rock’s mantra is “All Day, All Night,
All-Inclusive” with a high-energy vibe that
appeals to many millennials. For example, the
Hard Rock Hotel Riviera Maya near Playa del
Carmen in Mexico has a purpose built concert
theater inside the property. The venue hosts
the nightly “See The Show” event featur-
ing live bands and dinner, with one show for
families earlier in the evening and a later show
for adults.
See The Show concert halls are being devel-
oped for the rest of the Hard Rock all-inclu-
sive properties beginning next year.
There are also purpose-built outdoor concert
stages called Woodstock Terraces with audi-
ence capacity for up to 5,000 people, along
with full lighting and sound equipment for
special events and name musical acts ranging
from Flo-Rida to rock and roll icon Jon Bon
Jovi.
“We’ve seen tremendous success by offering
an experience that rocks, and that’s what
we’re looking for,” says Maduro. “I think it
helps attract the younger guest because the
brand is perceived as a cool and hip brand,
versus just a hotel brand, so it definitely
opens up the market to a younger clientele.
It’s also an aspirational brand for older clien-
tele because they also want to be cool and
hip, and remember how they felt during their
music days.”
The wealth of music memorabilia from differ-
ent eras at Hard Rock Hotels helps bring the
different age groups together, which is very
attractive for multi-generational families and
groups. For example, Madonna’s limousine
at Hard Rock Hotels Punta Cana provides a
great topic of discussion for all generations,
based on common interests in global music,
fashion and lifestyle trends.
The Rise of the Millennial All-Inclusive Traveler
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
20
Since guests at all-inclusive resorts pur-
chase the majority of their food and bever-
age on-property, the quality and variety of
meals plays a major role in determining the
success of a resort’s operations. On travel
review sites such as TripAdvisor, the subject
of food is often the most discussed subject
in the all-inclusive category.
A few years ago, Paradisus Resorts part-
nered with Chef Martin Berasategui, who’s
earned seven Michelin stars over the course
of his career. Berasategui consults on the
development of new Paradisus menus and
he helped develop the series of Passion by
Martin Berasategui restaurants at various
Paradisus properties, which require a sur-
charge. The Passion restaurant at Paradisus
Palma Real is consistently ranked #1 out of
172 restaurants in Punta Cana.
“When I was there it was so busy I wasn’t able
to get a reservation on any night, so that re-
ally shows how people are willing to pay extra
for a great meal at an all-inclusive resort,”
says Sarah Greaves-Gabbadon, a long-stand-
ing Caribbean travel journalist. “There’s a $70
supplement charge for a 7-course dinner, and
the restaurant is very dressy and elegant.”
Cortizas adds, “Food and beverage still has
tremendous potential for the evolution of all-
inclusive brands, and that’s why we partnered
with Chef Berasategui. That evolution in-
cludes the beverage side too. Plastic cups and
straws and a slice of pineapple are no longer
enough, which is honestly what still goes on
in the majority of the segment, but that’s not
really what customers expect anymore.”
New to the all-inclusive industry, Hyatt
Hotels launched the Ziva and couples-
only Zilara brands in 2014. Speaking with
Alexandre de Brouwer, general manager
for Hyatt Ziva Puerto Vallarta, he says the
two brands place a priority on discovery
and spontaneity in their programming.
For example, there are numerous street
vendor-style carts placed at different parts
of the hotel during different times of day.
The food is similar to what you can find in
the local markets because customers are
drawn to that authentic taste and delivery.
“Our guests look for those street carts
everyday because they like to be surprised
about what we prepared for that day,” says
de Brouwer. “We have a lot of different
things like tortillas and mangos, and it’s al-
ways changing. That’s very popular with our
guests because it’s fun and unexpected.”
Hyatt Ziva Puerto Vallarta has its own
secluded private beach that connects to a
river running through the property that be-
gins high up in the Sierra Madre Mountains.
Every morning one of the staff members
guides a group of 15-20 guests up the river
The Evolution of All-Inclusive Food & Wine
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
21
to learn about the local ingredients used in
the resort kitchens. Likewise, the resort of-
fers kayak fishing lessons where guests are
taught how to fish like the locals.
“Sometimes they will catch a large red
snapper and they will bring it back to the
resort for our chefs to prepare for a meal,”
says de Brouwer. He adds that Hyatt Ziva
has 24-hour room service and each of the
four restaurants has its own kitchen and
culinary teams.
Another innovative F&B program at Hyatt
Ziva, the resort offers tequila tastings
hosted by a tequila sommelier who teaches
diners about the finer points of tequila
making and how to pair the liquor with
different types of food. For a surcharge,
guests can also try premium tequilas such
as Jose Cuervo Reserva de la Familia Extra
Anejo, which retails in the U.S. for $145 a
bottle.
According to de Brouwer, mezcal has
become very trendy lately so his staff is
now incorporating that into tastings and
meal pairing education. This type of F&B
programming adds an experiential element
to the vacation experience, and more and
more resorts are starting to blend those
interactive and educational components
into their F&B offerings.
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22
An emerging challenge for the all-inclusive
industry over the last five years is the surging
demand for authentic travel experiences that
immerse the traveler in the local community.
Because the business and operational model
of all-inclusive resorts tends to keep guests
within the resort environment for most of
their guests’ vacation, that can remove the
guest from the local destination to varying
degrees. All-inclusive resorts have always had
tour desks on-property offering packaged
itineraries but many of these in the past have
been very touristy and overly contrived.
“There are many advantages of all-inclusive
resorts, because people want the security of
an all-inclusive hotel on their vacation, they
want the sense of calm, and they don’t want
to worry everyday how much they’re racking
up their hotel bill,” says Lelei LeLauLu, chair-
man of the leadership council in the Depart-
ment of Tourism & Hospitality Management
at George Washington University. “On the
other side of the coin, the guests are often
not leaving the resort and visiting the small
local restaurants and shops. They may leave
once or twice during their entire vacation, but
they want to be back in time for lunch or din-
ner because it’s already paid for.”
Two of the larger all-inclusive companies
operate their own standalone tour operators
and destination management companies.
Sandals owns Island Routes, which offers
a diverse selection of activities at all of the
islands where the company operates, and
the tours are available for guests staying at
any other branded property. It’s the same
situation at AMResorts, which is integrated
with its sister company Amstar Destination
Management under the Apple Leisure Group
flag.
Having that tour operator platform within the
company adds a layer of trust and seamless
quality management. The resort companies
continue to refine and expand these tour
operations because they offer incremental
revenue streams, and the more that guests
are outside of the resort, the less food and
beverage they’re consuming.
“We actively encourage guests to live the
local culture, as it promotes travelers having
a longer and a happier stay,” says Zozaya at
AMResorts. “We are invested in the destina-
tions where we are located, and we strive to
be true community partners and help the lo-
cal areas reap the benefits of having tourists
visit their destination. Each resort engages in
community social responsibility programs in
their respective markets, and we also extend
the opportunity to get involved to our guests
while they’re at the hotel.”
For example, Zoëtry Paraiso de la Bonita
Riviera Maya in Mexico invites both guests
and employees to work together with Save
the Children and the not-for-profit Lazos
Foundation. These organizations advocate
for more than 4,000 distressed children and
teens, and they offer training and education
for staff on related issues.
Cortizas at Paradisus Resorts adds, “One re-
ally interesting trend which I feel really strong
about is this whole voluntourism movement.
I think that this is a really interesting way that
you can actually take the guest out of the
property, because you’re giving them a really
compelling reason to get involved in what’s
going on in the destination, and you’re giving
them a really great guest experience.”
At Sandals, CEO Adam Stewart says many
travelers still assume that people stay within
the all-inclusive resorts the whole time, but
that is not necessarily the case for many
travelers.
The Rise of Voluntourism & Community Integration
The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
23
“This is about understanding the reality of
the situation,” explains Stewart. “That is a
perception that very much exists out there,
but with our organization, we interact with
the community on many levels. Sandals has
about a million customers a year, and last
year we took 600,000 guests outside of our
resorts on local tours and excursions with
Island Routes.”
For voluntourism opportunities, the Sandals
Foundation launched in 2009 with the mis-
sion “to fulfill the promise of the Caribbean
community through investment in sustain-
able projects in education, environment and
community, which improve people’s lives
and preserves our natural surroundings.”
Since its inception, Sandals Foundation has
hosted over 12,000 volunteers who have
impacted the lives of over 200,000 Carib-
bean nationals.
“One hundred percent of what we collect
goes into the communities, and that’s grow-
ing at about 100% per year since we started
in 2009,” explains Stewart.
LeLauLu says voluntourism is an excellent
way of generating interest and support for
community development in the develop-
ing world, but it’s value is often questioned
when operations are not highly organized.
“There’s no denying the fact that voluntour-
ism, if done well and it’s aligned with the
tourism strategies of the destination, can do
an awful lot of good things,” he says. “Unfor-
tunately, too much of it is ad hoc, but I think
the power of voluntourism has yet to be fully
harbored, and it has huge potential for local
communities.”
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The Evolution of the All-Inclusive Resort SKIFT REPORT 2015
25
Speaking with representatives from all of the major all-inclusive brands in this report, they all say that digital brand communications, social media and the rise of digital bookings are impacting the industry at a rising rate year over year. Here are some of their comments regarding that below.
Alex Zozaya, CEO, AMResorts: “AMResorts consistently uses social media marketing and digital mediums for brand awareness and as a customer service tool for our guests. It allows us to connect with the right people and develop a database of clientele to deploy strategic marketing campaigns. Leveraging these platforms has become an integral part of our campaigns, and we are always looking for new ways to integrate them more. For example, increasing our video presence is a priority for this year, as we have seen how our clients like to utilize this method to connect with AMResorts.”
Adam Stewart, CEO, Sandals Resorts: “The reason we believe in social media is because we recognized years ago that you’re only as good as your customers say you are. So even though we’re a big marketing company and we want to promote our hotels for people to see from all over the world, we literally believe it’s far more important that our customers speak on our behalf as to what they’re seeing. Social media has been a game changer for the company in the most positive way. It’s taught us to be better, it’s taught us what the customers want, and it’s become a tool for our management. By 7 o’clock in all of our hotels, our executive team will have read all of the commentary on TripAdvisor from the previous day, so it’s something we manage very, very closely.”
Tony Cortizas, VP of global brand strategy, Melia Hotels International: “Mobile is through the roof for us. For the first couple of months in 2015 compared to 2014, we’re up about 180% on direct channel bookings across the Melia brands. Mobile is obviously where it’s at. We’re launching an all new, fully responsive melia.com site in the last half of the year, because what was branding 10 years ago is entirely different today. It’s all about content generation these days. Content that lives and moves from the website to social to the guest experience on-property. So how we’re looking at branding is really about convergence. It’s no longer just a picture and description. It’s about real time social interaction and integration of all sorts of different elements, so the customer is not only getting a real feel for the hotel but also the public experience that they’re going to get pre, during and post. It’s in-credibly complicated and all of that is going to be integrated into the new website.
The Future of Social Media & Content Marketing
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26
Xavier Mufraggi, CEO, Club Med North America: “The move to digital has been enormous, and the shift from desktop to mobile and tablet has been immense. We have recently redesigned our website homepage to have a mobile and tablet-first approach, and we have seen a significant increase in bookings on mobiles and tab-lets. We are fortunate to have many loyal clients, and therefore we have a large fan base on social media. We have 1.5 million on Facebook, for example, which for the number of resorts we have is pretty impressive.
“We have recently started utilizing our social platforms to crowdsource input for new projects, such as our recently opened ski resort, Club Med Val Thorens in France. We invited our Facebook fans to help us select everything from the decor to activities at the resort. It’s been a very, very positive initiative, and our guests are excited about this because they feel that they are part of the brand. They’re not just liking or commenting but many of them are providing a lot of details about what they want. The true potential of this platform is energizing your clients and best ambassadors to be part of the company.”
Frank Maduro, VP of marketing, Hard Rock Hotels All-Inclusive Collection: “We see a continuous rise in social media use, and the numbers of transactions being closed on mobile is now about 50% of online transactions, which is aston-ishing given the complexity of our product offerings. Social media and mobile have become a key integral part of our strategy moving forward, and the nice thing about social media with people consuming information is that it’s not necessarily sales driven, it’s brand driven. It’s nice to see that change and to see people in tune with the brand. We’re also seeing more engagement with the blog, but mostly the blog is used as a reference tool, and then our guests are engaging on the social channels.”
1. Better explain what’s included and what’s not — All-inclusive hotels differ widely about what’s inclusive in the all-inclusive price. While food and beverage is generally standard, many resorts add surcharges for some specific meals, cocktails and wine. There’s also often confusion about sports activities, kids club fees and room types. It’s been proven that customers are willing to pay surcharges for heightened experiences, but resorts need to be transparent.
2. Build F&B programs that celebrate the local culture — Most resorts these days promote farm-to-table dining, so that’s no longer a differentia-tor. However, hotels can create experiences around local food sourcing such as trips to markets, fishing with local fishermen, and meeting the local farmers and food purveyors. Anything that shows activity behind the scenes is growing in interest especially for millennial consumers.
3. Develop official voluntourism programs and track success — There’s huge opportunity here in developing countries where tourists are eager to lend a helping hand in the local communities. Traditional activities range from light building to assisting with cleanup projects, but there’s a need for more skilled knowledge in professional development and computer training. Partnering with companies such as Pack For A Purpose also pro-vides a compelling level of customer and community engagement.
4. Content marketing drives incremental business — Some all-inclusive brands are actively developing blogs and other web-based content pro-grams to illustrate the overall guest experience and drive exposure to interesting on- and off-property experiences. In the past, the all-inclusive distribution system was all about the numbers, but upcoming generations of guests expect brands they patronize to be active online and engage in two-way conversation. Online content also drives incremental sales for everything from spa treatments to private dinners.
5. Always Be Testing — With the rise of multi-generational travel and con-tinued focus on millennial travel behavior, leading all-inclusive resorts are developing more age-specific experiences, especially with an experiential educational component. Teaching guests something new that will stay with them long after they return home builds memories and it drives loyalty among both parents and their kids. That is another area where hotels can deliver a better guest experience with online content marketing so guests can prepare for their vacations better.
5 Key Strategies for All-inclusive Resorts
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Club Med pioneered the all-inclusive concept and has been a constant trendsetter, welcoming guests in beautiful destinations around the globe for 65 years with both couples and families being an integral part of the legendary brand’s vacation concept.
From stunning beaches in the Caribbean to the exotic surroundings of Bali and Guilin in Asia, Club Med allows its clientele to travel the world while still enjoying the convenience and comfort of an upscale all-inclu-sive vacation. From top sport instruction, including a volleyball academy powered by the National Volleyball League at Club Med Sandpiper Bay in Florida and ski and snowboarding lessons from nationally renowned ski instructors at over 20 mountain resorts in the Alps, to enriching childcare programs, delectable dining and a dynamic international staff, the Club Med all-inclusive experience is unlike any other.
Creating moments of happiness is a philosophy that has been in the legendary brand’s DNA since its conception and it has continued for over six decades by staying innovative and agile, as well as finding creative ways to create special memories for both families and couples. From Club Med’s exciting new partnership with Cirque du Soleil, which will launch a completely new and unique concept in experiential travel, Club Med CREACTIVE by Cirque du Soleil, allowing guests of Club Med Punta Cana in the Dominican Republic to learn many of the exciting acrobatic disciplines showcased in famed Cirque du Soleil productions, to keeping a mindful balance between families and couples through special initia-tives in its accommodation such as its Zen Oasis areas created for adults and couples seeking tranquility.
Letter from Xavier Mufraggi, CEO of Club Med North America
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28
We also strive to continue introducing upscale new resorts from our digi-tally savvy ski resort in that opened in Val Thorens, France in December 2014 to the Finolhu Villas in the Maldives, which were ecologically de-signed with serenity in mind and the most recent addition to Club Med’s Villas & Chalets category, the most upscale accommodation selection within the brand’s portfolio.
With a range of land, water and snow activities, as well as endless op-tions for travelers to personalize their vacations, Club Med continues to pioneer travel trends and spread “happiness” around the world as it rises to the challenge of staying at the forefront of the travel industry.
Xavier Mufraggi CEO of Club Med North America
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Skift is a business information company focused on travel intelligence and offers news, data, and services to professionals in travel and professional travelers, to help them make smart decisions about travel. Founded in 2012 by media entrepreneur Rafat Ali, Skift is based in New York City and backed by Lerer Ventures, Advancit Capital and other marquee media-tech investors
Visit skift.com for more.
About Skift
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